After close to seven decades, Air India has made its way back to the Tata Group. While this was the expected outcome, hearing it officially makes it even sweeter. The cash-strapped airline had become a burden for the government, and it was high time for it to be privatised. Air India was nationalised way back in 1953.
According to a Times of India (TOI) report, Tata’s wholly-owned subsidiary, Talace Pvt Ltd, had put an enterprise value (EV) bid of Rs 18,000 crore with debt to be retained at Rs 15,300 crore and cash component.
In comparison, this was higher than what Ajay Singh’s consortium had put for the bid. Thus, the government has awarded the airline to the highest bidder, which is the Tata Group. This deal would mean that the Tata Group will now also have control of the Air India Express along with AI’s 50% stake in ground handling firm AI-SATS before the end of this fiscal.
Tata Group Now has Four Airlines in the Portfolio
After the take over of Air India from the government, the Tata Group now technically has four airlines in its portfolio. These airlines include Air India, Air India Express, AirAsia India, and Vistara. Apart from Vistara and Air India, the other two airlines are budget ones.
The Tata Group is expected to consolidate all the airline businesses in the near future. The two budget airlines and the two premium ones or the full-service carriers can be made a single entity to share resources and make the business strong.
But this will only be finalised after hearing what Singapore Airlines (SIA) has to say about this. The take over of Air India means that its global routes will now continue to operate, and the fans of the airline can soon expect upgraded services since it is privatised now and will run after profits like any other Tata Conglomerate.